LEXSEE 705 N.W.2D 850 - Land Use Law

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                                    LEXSEE 705 N.W.2D 850

            Wild Rice River Estates, Inc., Plaintiff and Appellant v. City of Fargo,
                      a municipal corporation, Defendant and Appellee

                                           No. 20050074

                          SUPREME COURT OF NORTH DAKOTA

                      2005 ND 193; 705 N.W.2d 850; 2005 N.D. LEXIS 237

                                    November 14, 2005, Filed

SUBSEQUENT HISTORY: US Supreme                     of Wild Rice's property in violation of the fed-
Court certiorari denied by Wild Rice River Es-     eral and state [***2] constitutions, and we af-
tates, Inc. v. City of Fargo, 2006 U.S. LEXIS      firm.
3923 (U.S., May 15, 2006)                             I
PRIOR HISTORY:            [***1] Appeal from             [*P2] Wild Rice is the owner and devel-
the District Court of Cass County, East Central    oper of a rural residential subdivision along the
Judicial District, the Honorable Douglas R.        banks of the Wild Rice River located about
Herman, Judge.                                     three miles south of Fargo. Wild Rice was
                                                   owned by Anton Rutten, who acquired the
DISPOSITION: AFFIRMED.                             farmland in 1947. Rutten anticipated that the
                                                   property would one day become a part of Far-
JUDGES: Gerald W. VandeWalle, C.J., Dale           go, and he hoped to develop a subdivision on
V. Sandstrom, Carol Ronning Kapsner, Mary          the property when the city grew. The subdivi-
Muehlen Maring, Donovan John Foughty, D.J..        sion was platted in 1993 with 38 lots, and 16 of
Opinion of the Court by VandeWalle, Chief          those lots are located on an oxbow of the river.
Justice.                                           Wild Rice was incorporated in 1994 for the
                                                   purpose of developing the subdivision. Because
OPINION BY: Gerald W. VandeWalle                   of county and township regulations, Wild Rice
                                                   was required to construct at its expense a con-
OPINION                                            nection to the local sanitary sewer system oper-
                                                   ated by Southeast Cass Water Resource Dis-
[**852] VandeWalle, Chief Justice.                 trict. Fargo and Wild Rice entered into a 10-
                                                   year agreement for the city to treat the sewage
     [*P1] Wild Rice River Estates, Inc. ("Wild    collected from the development, and Wild Rice
Rice"), appealed from a judgment dismissing        installed sewer and water services for 14 of the
its inverse condemnation action against the city   lots. At the time of the platting, the required
of Fargo and from an order denying its post-       flood elevation [**853] for lots in Wild Rice
trial motions. We conclude the trial court cor-    was one foot above base floor elevation. Wild
rectly ruled that Fargo's 21-month moratorium      Rice sold the first lot in the development in
on building permits did not constitute a taking
                                                                                                  Page 2
                                   2005 ND 193, *; 705 N.W.2d 850, **;
                                        2005 N.D. LEXIS 237, ***

1994 for $ 24,000 and Rutten purchased [***3]          mit to construct a home on one of the lots in
a lot in 1996 or 1997. In the meantime, Wild           Wild Rice, but the permit was denied because
Rice invested approximately $ 500,000 to de-           the lot was located within the area identified by
velop and promote the subdivision.                     FEMA in the preliminary designated floodway
                                                       covered by the moratorium. During the morato-
    [*P3] The Red River Valley, including the
                                                       rium, some buyers showed interest in purchas-
Wild Rice River, has a long and significant his-
                                                       ing Wild Rice lots and several people contacted
tory of flooding. A bridge that once connected
                                                       Wild Rice for information. One potential buyer
a road to the oxbow of the Wild Rice River
                                                       signed two purchase agreements and another
where lots are currently located was removed in
                                                       signed a lot-hold agreement, but no lots [***5]
1989 because of flood damage. During the
                                                       were sold. Wild Rice repeatedly attempted to
April 1997 flood, all undeveloped lots in Wild
                                                       persuade Fargo to lift the moratorium and issue
Rice were under water. The homes then exist-
                                                       permits for construction, but the city refused.
ing at the subdivision were not under water, but
the partially constructed Rutten home was                   [*P6] Wild Rice brought this inverse con-
damaged by water and "muck."                           demnation and tortious interference action on
                                                       March 30, 2000, and Fargo filed its answer on
     [*P4] After the 1997 flood, Fargo began
                                                       April 21, 2000. On April 27, 2000, the Fargo
working with the Federal Emergency Manage-
                                                       city engineer wrote to the city commissioners
ment Agency ("FEMA") to plan for future
                                                       and recommended that the building permit
floods, and on August 1, 1997, Fargo brought
                                                       moratorium be lifted and the city adopt FE-
the Wild Rice subdivision into its extraterritori-
                                                       MA's June 15, 1998 preliminary flood insur-
al jurisdiction. On June 15, 1998, FEMA de-
                                                       ance rate-map panel as the governing panel for
veloped a preliminary flood insurance rate-map
                                                       all flood-prone areas. Following a public hear-
for the area and several Wild Rice lots were
                                                       ing, the city commission voted to lift the mora-
located within the preliminary floodway. The
                                                       torium on May 1, 2000.
Wild Rice River did not have a mapped flood-
way before this time, and city officials believed          [*P7] After the moratorium was lifted,
the FEMA designation for the river would be            Wild Rice sold five lots. The party who signed
formalized in about 18 months. On August 10,           a purchase agreement during the moratorium
1998, the [***4] Fargo City Commission de-             purchased a lot in May 2000 for $ 32,900. Lots
cided that a "moratorium be placed on the issu-        were also purchased in March 2002 for $
ance of all building permits for new construc-         39,000, in November 2002 for $ 39,000, in July
tion in the floodway within the City of Fargo          2003 for $ 55,900, and in April 2004 for $
and its four-mile extraterritorial zone effective      59,900. Other sales were pending at the time of
August 10, 1998 for a period until the Fargo           these proceedings.
City Ordinances have been passed and FEMA                  [*P8] Following a bench trial, the trial
has made a final determination on their flood          court ruled in favor of Fargo, concluding there
plain map." Although several of Wild Rice's            had been no "taking" of Wild Rice's property
lots were affected by the moratorium, others           and no malicious [***6] interference [**854]
were not affected. During the approximately            with third-party contract rights. The court also
21-month period the moratorium was in effect,          denied Wild Rice's post-trial motions.
Fargo city officials participated in many meet-
ings with local, state and federal officials con-          II
cerning flood plan mitigation issues.
                                                        [*P9] Wild Rice does not challenge the trial
     [*P5] In May 1999, Anton Rutten's daugh-          court's dismissal of its claim for malicious in-
ter, Bonnie Rutten, applied for a building per-
                                                                                                     Page 3
                                    2005 ND 193, *; 705 N.W.2d 850, **;
                                         2005 N.D. LEXIS 237, ***

terference with third-party contract rights, but        fects a taking if the ordinance does not substan-
asserts the court erred in dismissing its claim         tially advance legitimate state interests.'" In do-
for inverse condemnation because Fargo's 21-            ing so, the Court summarized the remaining
month moratorium constituted a "taking" of its          valid rules that govern its takings clause juris-
property.                                               prudence. The Court identified two categories
                                                        of regulatory action that generally will be
 [*P10] Whether there has been a taking of              deemed per se takings: "First, [***8] where
private property for public use is a question of        government requires an owner to suffer a per-
law which is fully reviewable on appeal,                manent physical invasion of her property--
Braunagel v. City of Devils Lake, 2001 ND               however minor--it must provide just compensa-
118, P16, 629 N.W.2d 567, but we will not set           tion." Id. at 2081. Compensation is required for
aside a trial court's findings of fact on a takings     physical takings, "however minimal the eco-
claim unless they are clearly erroneous under           nomic costs [they] entail[]," because they
N.D.R.Civ.P. 52(a). Minch v. City of Fargo,             "eviscerate[] the owner's right to exclude others
332 N.W.2d 71, 73 (N.D. 1983). A finding of             from entering and using her property--perhaps
fact is clearly erroneous when, although there is       the most fundamental of all property interests."
some evidence to support it, the reviewing              Id. at 2082. "A second categorical rule applies
court is left with a definite and firm conviction       to regulations that completely deprive an owner
a mistake has been made. Buri v. Ramsey, 2005           of 'all economically beneficial use' of her prop-
ND 65, P13, 693 N.W.2d 619.                             erty." Id. at 2081 (quoting Lucas v. South
                                                        Carolina Coastal Council, 505 U.S. 1003,
 [*P11] Because Wild Rice challenges the                1019, 112 S. Ct. 2886, 120 L. Ed. 2d 798
moratorium as a taking of its property under            (1992)). The complete elimination of a proper-
both the federal [***7] and state constitutions,        ty's value is the determinative factor in this cat-
it is appropriate to outline takings jurisprudence      egory because the total deprivation of benefi-
under the respective constitutional provisions.         cial use is, from the landowner's point of view,
                                                        the equivalent of a physical appropriation.
                                                        Lingle, 125 S. Ct. at 2082. "Outside these two
                                                        relatively narrow categories," regulatory taking
 [*P12] The Fifth Amendment to the United
                                                        challenges are governed by the standards set
States Constitution guarantees that private
property shall not "be taken for public use,            forth in Penn Central Transp. Co. v. New York
                                                        City, 438 U.S. 104, 98 S. Ct. 2646, 57 L. Ed. 2d
without just compensation." U.S. Const.
                                                        631 (1978). [***9] Lingle, 125 S. Ct. at 2081.
Amend. V. The takings clause of the Fifth
                                                        These standards are "designed to allow 'careful
Amendment is made applicable to the states
                                                        examination and weighing of all the relevant
through the Fourteenth Amendment. See
                                                        circumstances.'" Tahoe-Sierra Preservation
Rippley v. City of Lincoln, 330 N.W.2d 505,
                                                        [**855] Council, Inc. v. Tahoe Reg'l Planning
507 n.1 (N.D. 1983).
                                                        Agency, 535 U.S. 302, 322, 122 S. Ct. 1465,
                                                        152 L. Ed. 2d 517 (2002) (quoting Palazzolo v.
 [*P13] In Lingle v. Chevron U.S.A. Inc., 544
                                                        Rhode Island, 533 U.S. 606, 636, 121 S. Ct.
U.S. 528, 125 S. Ct. 2074, 2082, 161 L. Ed. 2d
                                                        2448, 150 L. Ed. 2d 592 (2001) (O'Connor, J.
876 (2005), the United States Supreme Court
                                                        concurring)). The primary Penn Central factors
recently disavowed the "stand-alone" regulato-
                                                        are "'the economic impact of the regulation on
ry takings test announced in Agins v. City of
Tiburon, 447 U.S. 255, 260, 100 S. Ct. 2138, 65         the claimant and, particularly, the extent to
                                                        which the regulation has interfered with distinct
L. Ed. 2d 106 (1980), that "'the application of a
                                                        investment-backed expectations,'" and the
general zoning law to particular property ef-
                                                                                                     Page 4
                                   2005 ND 193, *; 705 N.W.2d 850, **;
                                        2005 N.D. LEXIS 237, ***

"'character of the governmental action'--for in-             parcel as a whole," whereas a tem-
stance whether it amounts to a physical inva-                porary restriction that merely caus-
sion or instead merely affects property interests            es a diminution in value is not.
through 'some public program adjusting the                   Logically, a fee simple estate can-
benefits and burdens of economic life to pro-                not be rendered valueless by a
mote the common good.'" Lingle, 125 S. Ct. at                temporary prohibition on economic
2081-82 (quoting Penn Central, 438 U.S. at                   use, because the property will re-
124). The "Penn Central inquiry turns in large               cover value as soon as the prohibi-
part, albeit not exclusively, upon the magnitude             tion is lifted. Cf. Agins v. City of
of a regulation's economic impact and the de-                Tiburon, 447 U.S., at 263, n.9, 100
gree to which it interferes with legitimate prop-            S. Ct. 2138 ("Even if the appel-
erty interests." Lingle, 125 S. Ct. at 2082.                 lants' ability to sell their property
                                                             was limited during the pendency of
 [***10] [*P14] The United States Supreme                    the condemnation proceeding, the
Court has addressed whether a moratorium on                  appellants were free to sell or de-
land development imposed during a govern-                    velop their property when the pro-
ment agency's process of devising a compre-                  ceedings ended. Mere fluctuations
hensive land-use plan constitutes a per se tak-              in value during the process of gov-
ing of property requiring compensation under                 ernmental decisionmaking, absent
the takings clause of the Fifth Amendment. The               extraordinary delay, are 'incidents
Court's decision in Tahoe-Sierra, 535 U.S. 302,              of ownership. They cannot be con-
306, 122 S. Ct. 1465, 152 L. Ed. 2d 517, in-                 sidered as a "taking" in the consti-
volved two moratoria that prohibited virtually               tutional sense'" (quoting Danforth
all development on property for a 32-month                   v. United States, 308 U.S. 271,
period in an effort to maintain the status quo               285, 60 S. Ct. 231, 84 L. Ed. 240
while the government agency studied the im-                  (1939))).
pact of development on Lake Tahoe and de-
signed a strategy for environmentally sound
growth. The Court rejected the argument that a         Id. at 331-32.
temporary deprivation of all economically via-
ble use compels a finding that a categorical tak-       [*P15] The Supreme Court in Tahoe-Sierra
ing has occurred under Lucas. The court ex-            also rejected a proposed per se rule that any
plained:                                               moratorium lasting more than one year is con-
                                                       stitutionally unacceptable. The Court acknowl-
        An interest in real property is de-            edged "it [***12] may well be true that any
      fined by the metes and bounds that               moratorium that lasts for more than one year
      describe its geographic dimensions               should be viewed with special skepticism" and
      and the term of years that describes             "the duration of the restriction is one of the im-
      the temporal aspect of the owner's               portant factors that a court must consider in the
      interest. See Restatement of Prop-               appraisal of a regulatory takings claim," but
      erty §§ 7-9 (1936). Both dimen-                  concluded "the interest in 'fairness and justice'
      sions must be considered if the in-              will be best served by relying on the familiar
      terest is to be viewed in its entire-            Penn Central approach when deciding cases
      ty. Hence, a permanent [***11]                   like this, rather than by attempting [**856] to
      deprivation of the owner's use of                craft a new categorical rule." Tahoe-Sierra, 535
      the entire area is a taking of "the              U.S. at 341-42.
                                                                                                       Page 5
                                   2005 ND 193, *; 705 N.W.2d 850, **;
                                        2005 N.D. LEXIS 237, ***

   B                                                           merely because it diminishes the
                                                               value of the regulated property or
 [*P16] Under N.D. Const. art. I, § 16, "pri-                  disallows [***14] the best and
vate property shall not be taken or damaged for                highest use of the property. Grand
public use without just compensation." This                    Forks-Traill, at 346; Rippley, at
Court has said our state constitutional provision              507; Eck, at 197. Governmental
is broader in some respects than its federal                   regulation constitutes a taking for
counterpart because the state provision "'was                  public use only when it deprives
intended to secure to owners, not only the pos-                the owner of all or substantially all
session of property, but also those rights which               reasonable uses of the property.
render possession valuable.'" Grand Forks-                     Grand Forks-Traill, at 346;
Traill Water Users, Inc. v. Hjelle, 413 N.W.2d                 Rippley, at 507; Kraft, at 761.
344, 346 (N.D. 1987) (quoting Donaldson v.
City of Bismarck, 71 ND 592, 71 N.D. 592, 3
N.W.2d 808 Syll. P1 (1942)). Nevertheless, this        This Court has also adopted the parcel-as-a-
Court has looked to both state and federal             whole rule, relying upon Keystone Bituminous
[***13]      precedents in construing takings          Coal Ass'n v. DeBenedictis, 480 U.S. 470, 497,
claims under the state constitution, see, e.g.,        107 S. Ct. 1232, 94 L. Ed. 2d 472 (1987) (quot-
Southeast Cass Water Res. Dist. v. Burlington          ing Penn Central, 438 U.S. at 130-31), for the
N.R.R. Co., 527 N.W.2d 884, 890 (N.D. 1995),           proposition that "in determining whether a re-
and our cases on inverse condemnation under            striction constitutes a taking, courts look to the
the state constitution bear some similarities to       effect of the restriction on the parcel of land as
the federal analysis.                                  a whole, rather than to the effect on individual
                                                       interests in the land." Hjelle, 413 N.W.2d at
 [*P17] In Braunagel, 2001 ND 118, P16, 629            346. The Supreme Court stated in Penn Cen-
N.W.2d 567, this Court summarized its juris-           tral, 438 U.S. at 124, that it, "quite simply, has
prudence on regulatory takings:                        been unable to develop any 'set formula' for
                                                       determining when 'justice and fairness' require
         The City, acting through its po-              that economic injuries caused by public action
       lice powers, has broad authority to             be compensated by the government." We have
       enact land-use regulations without              also observed that "clear guidelines are similar-
       compensating the landowner for                  ly absent [***15] from the variety of prece-
       the restrictions placed upon use of             dents pronounced by this court." Minch v. City
       the property. Grand Forks-Traill                of Fargo, 332 N.W.2d 71, 73 (N.D. 1983).
       Water Users, Inc. v. Hjelle, 413                    C
       N.W.2d 344, 346 (N.D. 1987);
       Rippley v. City of Lincoln, 330                  [*P18] Wild Rice argues the 21-month mora-
       N.W.2d 505, 507 (N.D. 1983);                    torium constituted a per se categorical taking of
       Kraft v. Malone, 313 N.W.2d 758,                its property because the moratorium denied it
       761 (N.D. 1981), overruled on oth-              all economically viable use of the property.
       er grounds by Shark v. Thompson,                Wild Rice relies on the Supreme Court's state-
       373 N.W.2d 859 (N.D. 1985); Eck                 ment in Lucas, 505 U.S. at 1019 (footnote
       v. City of Bismarck, 283 N.W.2d                 omitted), that "when the owner of real property
       193, 197 (N.D. 1979). A zoning                  has been called upon to sacrifice all economi-
       ordinance does not constitute a tak-            cally beneficial uses in the name of the com-
       ing of property for public use
                                                                                                    Page 6
                                   2005 ND 193, *; 705 N.W.2d 850, **;
                                        2005 N.D. LEXIS 237, ***

mon good, that is, to [**857] leave his proper-        infrastructure for the development. Wild Rice
ty economically idle, he has suffered a taking."       also relies on the pending sales of lots that did
                                                       not take place because potential purchasers
 [*P19] The Supreme Court's decision in Ta-            were unable to obtain building permits. Wild
hoe-Sierra disposes of Wild Rice's claim that          Rice argues the moratorium interfered with its
Lucas controls this case. Lucas involved a per-        investment-backed expectations because of its
manent, rather than a temporary taking. The            inability to sell residential lots after investing $
Court stated the Lucas "holding that the perma-        500,000 in the property. Wild Rice argues the
nent 'obliteration of the value' of a fee simple       governmental action in this case is character-
estate constitutes a categorical taking does not       ized by bad faith, because the city conducted no
answer the question whether a regulation pro-          reviews or studies to create new ordinances ap-
hibiting any economic use of land for a 32-            plicable to its property during the moratorium
month period has the same legal effect." Tahoe-        period and lifted the moratorium only after im-
Sierra, 535 U.S. at 330-31. The Court said "the        pacted landowners brought inverse condemna-
[***16] categorical rule in Lucas was carved           tion actions. Wild Rice claims the moratorium
out for the 'extraordinary case' in which a regu-      was used by the city simply "to prevent con-
lation permanently deprives property of all val-       struction on Wild Rice's previously platted real
ue; the default rule remains that, in the regula-      property during an unsuccessful attempt to se-
tory taking context, we require a more fact spe-       cure Federal funding to purchase Wild Rice's
cific inquiry." Id. at 332.                            real property at a lower price (a price without
                                                       need for compensation for new construction)."
 [*P20] We conclude that the moratorium did
not constitute a per se categorical taking of           [*P23] However, in concluding Wild Rice had
Wild Rice's property under the federal and state       not established a taking under the Penn Central
constitutions.                                         factors, the trial court reasoned:
                                                               12. [Wild Rice] retained eco-
                                                             nomically [***18] viable use of
 [*P21] Wild Rice argues the moratorium con-
                                                             its property during the moratorium.
stituted a taking under the Supreme Court's
                                                             Cf. Palazzolo v. Rhode Island, 533
Penn Central analysis. Under Penn Central,
438 U.S. at 124, the particularly significant fac-           U.S. 606, 632, 121 S. Ct. 2448, 150
                                                             L. Ed. 2d 592 (2001) (holding that
tors a court must consider are: 1) the "economic
                                                             reduction in developer's property
impact of the regulation on the claimant"; 2)
                                                             from $ 3,150,000 to $ 200,000, due
"the extent to which the regulation has inter-
                                                             to a state coastal committee's re-
fered with distinct investment-backed expecta-
                                                             fusal to allow development in cos-
tions"; and 3) "the character of the governmen-
                                                             tal area, did not amount to a depri-
tal action."
                                                             vation of all economic value and
                                                             therefore did not amount to a total
 [*P22] Wild Rice contends the evidence sup-
                                                             takings claim).
ports a conclusion that a taking has occurred.
There was evidence of economic impact on the
claimant, according to Wild Rice, because of
the nearly $ 500,000 it invested in the property
between 1992 and 1999, most of which was
mandated by governmental entities [***17]
that required a public sewer system and road
                                                                                               Page 7
                             2005 ND 193, *; 705 N.W.2d 850, **;
                                  2005 N.D. LEXIS 237, ***

  13. There is a huge disconnect                       posed to considering a permit for a
between the fact of the history of                     single parcel).
[Wild Rice] development and its
claim for compensation. Pre-
moratorium sales were [**858] at
the rate of 1/2 lot per year (the av-
erage lots sales for 1994 until July
1998). Rounding up 21 to 24
months, the loss was one (1)                             16. The moratorium was not an
lost/delayed lot sale. At trial, loss                  appropriation of [Wild Rice's]
on one of the riverside lots would                     property for public use, but rather a
be approximately $ 30,000 accord-                      temporary moratorium until local,
ing to the Wild Rice River Estates                     State and Federal officials could
brokers. A mere delay equals the                       adequately review a flood plain
sum of delayed investment oppor-                       management for the area so devas-
tunity ("interest") would be more                      tated by the 1997 flood.
in the nature of $ 3,000, a far cry
from the one million dollars plus
claimed by [Wild Rice]. Further-
more, "mere fluctuations in value
during the process of governmental                       ....
decision-making, absent extraordi-
nary delay, are incidents of owner-
ship. They cannot [***19] be con-
sidered a taking in the constitu-
tional sense." Tahoe-Sierra, 535                         18. Fargo city officials acted in
U.S. at 332.                                           good faith and with proper dili-
                                                       gence concerning the moratorium
                                                       as part of an overall effort to main-
                                                       tain the status quo until flood plan-
                                                       ning efforts and development
 ....                                                  could be re-evaluated after the
                                                       devastating 1997 flood.

   15. The moratorium did not sin-
gle out Plaintiff's property. Rather,                     19. Fargo city officials were jus-
it applied to other developments as                    tified in waiting for FEMA's final
well and the City has not paid                         adoption of a floodway [***20]
compensation to other developers                       for the Wild Rice River and other
similarly affected. Cf. Tahoe-                         rivers in the Red River Valley.
Sierra, 535 U.S. at 340 (stating
that the need to protect planners'
decisional process is stronger when
developing a regional plan as op-
                                                                                                  Page 8
                                   2005 ND 193, *; 705 N.W.2d 850, **;
                                        2005 N.D. LEXIS 237, ***

        20. The moratorium protected                   tance of a realtor experienced in river develop-
      prospective buyers who might                     ments and a two-year tax exemption offer. Lots
      build on a river lot, not knowing,               in Wild Rice were prone to flooding and all but
      for example, that a home previous-               two of the Wild Rice lots were covered by wa-
      ly located on or next to the lot was             ter during the 1997 flood. Additional flooding
      damaged or destroyed by the 1997                 occurred in 2001. After the moratorium was
      flood.                                           lifted, prospective buyers expressed concerns
                                                       about water and flood issues. As the trial court
                                                       found, "many [**859] factors" besides the
                                                       moratorium "affected [Wild Rice's] investment
                                                       over the years." The evidence suggests Wild
        21. Given the devastation and                  Rice's investment-backed expectations were
      cost in damages caused by the                    unreasonable.
      flood, the City's moratorium was a
      reasonable, appropriate land-use                  [*P25] Moreover, courts have said the focus
      regulation, issued in an effort to               of the economic impact criterion is the change
      maintain the status quo of devel-                in fair market value of the subject property
      opment in flood-prone areas until                caused by the regulatory imposition measured
      Fargo city officials and local, state            by comparing the market value of the property
      and federal agencies had an oppor-               immediately before the governmental action
      tunity to properly review and pre-               with the market value of the same property
      pare an appropriate flood man-                   immediately after the action is terminated. See,
      agement plan for flood-prone areas               e.g., Cane Tennessee, Inc. v. United States, 57
      within the City of Fargo's extrater-             Fed. Cl. 115, 123 (Fed. Cl. 2003); Leon
      ritorial jurisdiction.                           [***22] County v. Gluesenkamp; 873 So. 2d
                                                       460, 467 (Fla. App. 2004). Here, Wild Rice
                                                       sold more lots at higher prices after the morato-
                                                       rium was lifted than it did before the moratori-
                                                       um became effective. The most recent lot sale
        22. The City's moratorium bears                reflected in the record was for $ 59,900, more
      a reasonable relationship to a legit-            than double the $ 24,000 Wild Rice received
      imate governmental purpose; it is                for a lot in 1994. Under these circumstances, it
      not arbitrary or capricious and does             is far less likely that a compensable taking has
      not amount to an unconstitutional                occurred. See Leon County, 873 So. 2d at 467
      taking of property requiring pay-                (no taking where landowners sold property for
      ment of just compensation.                       $ 500,000 profit after court-ordered moratori-
                                                       um on development was dissolved); Condem-
                                                       nation By The Municipality of Penn Hills, 870
 [*P24] The trial court's factual findings are         A.2d 400, 409 (Pa. Cmwlth. 2005) (no taking
supported by the record. Although Wild Rice            where 29-month injunction to suspend property
had originally projected sales of four lots per        development did not prevent landowners from
year, Wild Rice had difficulty selling any lots        gaining a reasonable return on their investment
from [***21] the very beginning of its exist-          after injunction was dismissed).
ence. Only one lot was sold to an outside party
between 1994 and 1998 before the moratorium             [*P26] An extraordinary delay in governmen-
became effective, notwithstanding the assis-           tal decisionmaking coupled with bad faith on
                                                                                                 Page 9
                                  2005 ND 193, *; 705 N.W.2d 850, **;
                                       2005 N.D. LEXIS 237, ***

the part of the governmental body may result in           E
a compensable taking of property. See Bass En-
ters. Prod. Co. v. United States, 381 F.3d 1360,       [*P28] Wild Rice argues it is entitled to be
1366 (Fed. Cir. 2004); Wyatt v. United States,        compensated for Fargo's temporary [**860]
271 F.3d 1090, 1098 (Fed. Cir. 2001); [***23]         taking of its property under principles an-
Appolo Fuels, Inc. v. United States, 54 Fed. Cl.      nounced by this Court in Rippley, 330 N.W.2d
717, 737 (Fed. Cl. 2002); Byrd v. City of             505.
Hartsville, 365 S.C. 650, 620 S.E.2d 76, 2005
WL 2291782, *5 (S.C. 2005). Fargo claimed it           [*P29] Rippley, 330 N.W.2d at 506, involved
issued the moratorium in an effort to maintain        a Lincoln city zoning ordinance that zoned for
the status quo until the city, along with other       public use 20 acres of the Rippleys' property
governmental bodies, could determine whether          which previously had been zoned residential.
it was safe to build in flood prone areas. The        The city intended to use the land in the future
moratorium applied to all land located within         for construction of a school and other govern-
the preliminary designated floodway, not only         mental operations, and after the city failed to
to property owned by Wild Rice. According to          commence [***25] eminent domain proceed-
Fargo, the city believed it was appropriate to        ings or otherwise offer to compensate the
wait for FEMA's final adoption of a floodway          Rippleys for their land, they brought an inverse
before building should continue. Although             condemnation action. Id. The trial court dis-
Wild Rice argues the city was simply keeping          missed the claim, concluding the city's action
the value of its property deflated while waiting      did not constitute a taking entitling the
to secure federal funding to purchase the prop-       Rippleys to compensation. Id.
erty, the trial court found that "city officials
acted in good faith and with proper diligence          [*P30] On appeal, this Court reversed, hold-
concerning the moratorium." We apply the              ing that by zoning the Rippleys' property for
clearly erroneous standard to trial court deter-      public use "Lincoln has deprived the Rippleys
minations of good or bad faith. See, e.g., Bel-       of all reasonable use of their property and has
field Educ. Ass'n v. Belfield Pub. Sch. Dist.,        thereby accomplished a taking of the property
496 N.W.2d 12, 14 (N.D. 1993); Corwin Chrys-          for which just compensation is constitutionally
ler-Plymouth, Inc. v. Westchester Fire Ins. Co.,      required." Rippley, 330 N.W.2d at 509. The
279 N.W.2d 638, 644 (N.D. 1979). [***24] In           Court then turned to the issue of the proper
light of the evidence, the trial court's finding      remedy for the city's taking of the Rippleys'
that the city acted in good faith is not clearly      property through promulgation of the zoning
erroneous nor can we say the 21-month length          ordinance and adopted Justice Brennan's view
of the moratorium was extraordinary under the-        in San Diego Gas & Elec. Co. v. City of San
se circumstances.                                     Diego, 450 U.S. 621, 653, 101 S. Ct. 1287, 67
                                                      L. Ed. 2d 551 (1981) (Brennan, J., dissenting)
     [*P27] Wild Rice has failed to establish
                                                      (footnotes omitted), that "'once a court estab-
that the city's temporary moratorium resulted in
                                                      lishes that there was a regulatory "taking," the
an unconstitutional taking of Wild Rice's prop-
                                                      Constitution demands that the government enti-
erty under the Penn Central analysis. Wild
                                                      ty pay just compensation for the period com-
Rice has not advanced a principled theory for
                                                      mencing on the date the regulation first effected
modifying the Penn Central analysis for state
                                                      the "taking," and ending [***26] on the date
constitutional purposes. We conclude no un-
constitutional taking of Wild Rice's property         the government entity chooses to rescind or
                                                      otherwise amend the regulation.'" Rippley, 330
has occurred under the federal and state consti-
                                                      N.W.2d at 510. We concluded:
                                                                                                  Page 10
                                   2005 ND 193, *; 705 N.W.2d 850, **;
                                        2005 N.D. LEXIS 237, ***

                                                       by" this Court's decision in Rippley. Because
        If a landowner proves that gov-                Fargo's answer was filed before the city lifted
      ernmental regulation has deprived                the moratorium, the city did not allege that the
      him of all reasonable use of his                 moratorium had been terminated, and did not
      property, he is entitled to receive              subsequently move to amend its answer to al-
      just compensation. However, the                  lege this fact. However, Rippley does not ad-
      landowner cannot force a perma-                  dress pleading requirements for an inverse con-
      nent taking upon the governmental                demnation action. The city alleged in its answer
      body if the taking is reversible and             that the moratorium on the issuance of building
      the government wants to halt the                 permits was "temporary," and all parties
      taking. Rather, under its police                 [**861] were obviously aware that the morato-
      power authority, the governmental                rium had been terminated long before the trial
      body can choose to rescind the or-               began. Wild Rice's argument that the actual
      dinance or other regulation in                   termination of the moratorium should be ig-
      which case it must compensate the                nored under these circumstances is without
      landowner only for a temporary                   merit.
      taking measured by the time period                    [*P32] Wild Rice also asserts Rippley re-
      between the date the regulation                  quires that, as [***28] a matter of law, Fargo
      took effect and the date it was re-              pay it just compensation for the interim period
      scinded. If, however, the govern-                between the enactment of the moratorium and
      mental body chooses to retain the                the date the moratorium was lifted. But, the
      ordinance or other regulation the                zoning ordinance in Rippley was essentially
      landowner is then entitled to com-               permanent in nature, rather than temporary.
      pensation for a permanent taking
                                                       This Court said "Lincoln's zoning ordinance . . .
      of his property. Upon remand of                  destroys all reasonable use of the Rippleys'
      this case for a determination of the             property leaving the Rippleys at the mercy of
      damage issue, the City of Lincoln                Lincoln as to a future date, if ever, that the lat-
      must inform the court of its inten-              ter may be willing to purchase the property for
      tion to either rescind or to continue            construction of public facilities." Rippley 330
      the "P Public Use" zoning upon the               N.W.2d at 508 (footnote omitted). Moreover, in
      Rippley property. With that infor-               Rippley the city had accomplished a taking of
      mation, the court can hold further               the property. As a consequence, this Court held
      hearings [***27] to determine the                that once a taking of property has been estab-
      appropriate measure of damages in                lished, the landowner cannot force upon the
      accordance with the approach ad-                 governmental body the remedy for a permanent
      vanced by Justice Brennan in San
                                                       taking of property if it should choose to halt the
      Diego, supra, which we adopt in                  taking. Id. at 511. Under Rippley, the govern-
      this case.                                       mental body is given an opportunity to lessen
                                                       the amount of compensation it must pay to the
                                                       landowner by rescinding or correcting the regu-
Rippley, 330 N.W.2d at 511 (footnote omitted).         lation that caused the taking. Justice Brennan's
                                                       proposed rule articulated in his dissent in San
 [*P31] Wild Rice argues it should have been           Diego, upon [***29] which this Court relied
allowed to assert a permanent taking of proper-        upon in Rippley and which the United States
ty by Fargo, because the city "did not properly        Supreme Court eventually endorsed in First
plead 'abandonment of moratorium' as required          English Evangelical Lutheran Church of Glen-
                                                                                                 Page 11
                                  2005 ND 193, *; 705 N.W.2d 850, **;
                                       2005 N.D. LEXIS 237, ***

dale v. County of Los Angeles, 482 U.S. 304,          when it denied those motions. Therefore, Wild
315, 318, 107 S. Ct. 2378, 96 L. Ed. 2d 250           Rice can show no prejudice resulted from the
(1987), only "addressed the separate remedial         court's failure to allow Wild Rice a timely ob-
question of how compensation is measured              jection under N.D.R.Ct. 7.1(b). Moreover,
once a regulatory taking is established." Tahoe-      "when the court affixes its signature to the find-
Sierra, 535 U.S. at 328. The Supreme Court in         ings, even though drafted by counsel, they be-
Tahoe-Sierra, 535 U.S. at 328, specifically           come the findings of the court, and if they ade-
pointed out that First English did not address        quately explain the basis of the court's decision
"the quite different and logically prior question     it will be upheld." Schmidkunz v. Schmidkunz,
whether the temporary regulation at issue had         529 N.W.2d 857, 858 (N.D. 1995). Wild Rice's
in fact constituted a taking."                        arguments are without merit.
 [*P33] In this case, we have concluded the
city's 21-month moratorium on issuing building             [*P35] We conclude Fargo's 21-month
permits did not constitute a taking of Wild           moratorium on building permits did not consti-
Rice's property. The choice of remedies for an        tute a taking of Wild Rice's property under the
established taking of property provided in            federal and state constitutions. [**862] We
Rippley, 330 N.W.2d at 511, does not come into        have considered Wild Rice's other arguments
play under these circumstances. Rippley does          and deem them to be either without merit or
not support Wild Rice's argument that a taking        unnecessary to resolve in view of our [***31]
of its property has occurred under the state con-     disposition of this case. The judgment and the
stitution.                                            order denying Wild Rice's post-trial motions
                                                      are affirmed.
                                                          [*P36] Gerald W. VandeWalle, C.J.
 [*P34] Wild Rice argues the trial court erred            Dale V. Sandstrom
in [***30] "prematurely" adopting Fargo's
proposed findings, conclusions and order                  Carol Ronning Kapsner
"without notice to Wild Rice" and in allowing             Mary Muehlen Maring
the city to include in those findings and conclu-
sions "facts and case law not originally deter-           Donovan John Foughty, D.J.
mined by the trial court." Wild Rice's com-               [*P37] The Honorable Donovan John
plaints about the "prematurely" adopted find-         Foughty, D.J., sitting in place of Crothers, J.,
ings and conclusions were raised in its post-         disqualified.
trial motions and were considered by the court

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